In-Kind Donations and Offset Trade

In his book, the Mystery of Capital, Hernando De Soto calls unproductive, unsold assets “dead capital” and estimates there is 9.3 trillion dollars of it world-wide.

Unsold production time, empty rooms, unfilled advertising space, vacant appointment time, depreciating inventory, mislabelled stock, end-of-line items, last seasons merchandise, entry tickets or idle assets are all items which can be donated to non-profit organizations in need.

For some businesses, providing in-kind donations to organizations doing good work in their community is the easiest way they can support you. They may not be able to provide direct financial donations, but it’s far easier for them to simply share resources or expertise they already have.

Unfortunately, due to lack of storage capacity, issues with handling, inappropriateness of the donated item or other logistical issues, many non-profit organizations turn away a constant supply of substantial in-kind donations, most of which end up in landfills.

Ormita offers the opportunity for your organization to accept virtually any in-kind donation and turn it into things that you need.

Using the Ormita trading platform, your organization can trade unwanted in-kind donations for essential goods and services that you need.

There is little to no handling of the products by your organization.

Our staff are courteous and professional and will always treat your donors with respect, ensuring that they will return to your organization the next time they have a charitable donation to make.

We strive to make donating a hassle free experience.

There is no fee for our service to your organization or your donors.

You receive the maximum possible return from donated goods and services.

Our solution is environmentally friendly and socially responsible.

There are billions of dollars of goods and services just waiting to be accessed by your organization through the Ormita in-kind donation program.

What are “in-kind” donations?

An “in-kind” donation is a contribution of time, service or goods made by a donor to help support the operations or services provided by your organization. It isn’t cash. Therefore the donor does retain a degree of control over the donation. This doesn’t occur when a donor gives you a cash donation.

Because of this “relationship”, donors products need to be used effectively and efficiently. They also need to know that their product is not going to end up on-sold to a competitor or an existing cash customer.

Some examples of in-kind donations include:

–Books

–Food supplies

–Medical kits

–Office equipment

–Printing

–Refreshments

–Telecommunications equipment

Why accept “in-kind” donations

1.You can acquire goods and services that you need without spending cash

The cash you save can be used to pay for other products or services that you have not been able to acquire through the Ormita donation process.

2.Expands your capacity

Your organization can suddenly acquire goods and services which you otherwise might never have purchased. More printing, radio advertising, better equipment etc.

3.Builds relationships

Approaching a prospective donor and receiving an in-kind donation provides an opportunity for that person or organization to support your cause without actually investing any cash. If the donor likes how the donation issue is handled, gets a tax benefit or finds that their product is placed in a new market, they may take an even greater interest in the activities of your organization.

An in-kind donation can be the beginning step of a substantial relationship.

4.Provides a way for your donors to continue giving during tough times

An in-kind gift’s market value can be more than double the value of a cash donation from the same donor, since the gift’s cost to the donor is only the product’s marginal cost, which might be only half of its market price.

Moreover, many corporations have spare capacity that they could put to use for nonprofits at a negligible extra cost to themselves; for example, transportation or shipping companies may have spare container space; IT consultancies, temporarily underutilized communications engineers.

§Tax-deductible benefits may be greater than income received from a sale.

§Creates savings in warehouse space, disposal costs and staff time

§If they plan to close or consolidate a warehouse or distribution centre, it may be more cost-effective to donate that inventory rather than move it to another location.

§Helps to reduce waste and meet environmental goals.

§Staff and customers want to see their surplus goods going to people in need rather than to the dump.

§Donated goods are generally only deductible at cost (not market value). Using the Ormita In-Kind Donation Program their donation is eligible for a tax deduction at full retail value.

§Ormita effectively converts items which a charity may not be able to directly use into goods and services they need.

§A single email or phone call to Ormita can take all of their surpluses off their hands.

Service Industries

§Allows for a full retail value tax deduction for surplus time, space, unsold seats or service-related offerings.

§Provides a creative way for staff to give to their nominated charities without the need for time-off or cash from their pockets.

§Can help fulfil a company’s philanthropic, environmental and/or social welfare goals and translate into goodwill.

General Benefits for Businesses

§Businesses who donate trade credits receive the up-front tax benefits at the time of donation – even though they may only earn the trade credits at a later date.

§Allows businesses to tie their giving to your sales or customer activities without spending any additional cash to do so.

When a business makes a donation to charity it comes out of their profit margins. In-kind donations are a way to reduce their idle production time, increase staff loyalty, create goodwill and publicity and access tax deductions.

What is Ormita

Ormita acts as a clearinghouse for the trade of excess capacities, goods and services through a combination of online e-commerce, clearing, 24 hour telephone brokering and independent licensees and brokers.

At the core of the business is an electronic trading platform that allows participants to trade their excess capacity or unsold time for:

Rather than promoting direct trade between participants the Company brokers trades through a centralized marketplace.

1.Transactions are recorded in a centralized “ledger” which records the value of the items purchased (debit) and sold (credit) – much like a clearinghouse does for stocks, or a commercial bank does for checks.

2.This ledger system utilises a “trade credit” as a method of accounting with 1 Trade Credit = $1.

3.Just like any brokerage firm, Ormita receives a cash commission on each transaction.

4.Non-profit donor and recipient transactions are not subject to this commission as they fall within the boundaries of the Company’s Corporate Social Responsibility Charter.

Trading “In-Kind” Donations

Ormita provides non-profit organizations the option to exchange their donated goods or services with other organizations in return for things that they need.

Instead of trading goods and services directly, a non-profit organization will list their donated product with Ormita and sell it to another organization for “Ormita Credits”.

Ormita Credits record the real market value for the products or services acquired by each organization. 1 Ormita Credit = $1 for the sake of book-keeping.

These Credits can then be used to acquire other market-value goods or services without the need for cash.

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.